Exercising Control Will Make You A More Powerful Negotiator

Exercising Control Will Make You A More Powerful Negotiator

From guest blogger Greg Williams.

The perception of power is a two-way process in a negotiation; the projector sees it from one perspective and the receiver views it from another. Based on the reaction of either, the perception gets revised and the loop continues.

What You Need to Know to Make Your MINDBODY Integration with ActiveCampaign a Success

What You Need to Know to Make Your MINDBODY Integration with ActiveCampaign a Success

This post was contributed to the ActiveCampaign blog.

How do you use ActiveCampaign and MINDBODY together to see success? The short answer: Simplify the process and automate where you can. Here’s what you need to know—and what you need to do first—before you connect ActiveCampaign to your MINDBODY account.

Merchant Card Processing Rates Demystified

So now that we agree that no one has a special deal with the credit card companies, we need to discuss pricing structures. This is the one aspect of this industry that is purposefully made to be difficult to understand—at least in my opinion. Three points to keep in mind before we start:

  1. To keep things as simple as possible, I'm going to assume the merchant processor is charging you only a set percentage (ignoring per-item fees and any other add-ons).

  2. Any interchange fees I mention are taken from this document, published by Visa.

  3. The rates I use are examples and are not representative of the exact minimum and maximum of interchange. They are used only to make an example.

There are several ways merchant services can be priced: the flat rate, one flat rate + surcharge; a three-level pricing structure; or a flat rate above cost.

  • The flat rate : Made popular by companies like Square, is a bit tricky. I don’t purport to know everything but on this one I can guess. From my experience in a standard retail location approximately 80% of all transactions at cost will fall in a range between 0.05% + $0.21 to 1.65% + $0.10. So if you are being charged a flat rate at 2.5% + 10¢ for swiped and chip cards then the margin is approximately between 2.45% + $0.21 and 0.85%. In more concrete terms for every $100 you pay between $2.66 and $0.85. Convenient yes but is it really cost effective?

  • One flat rate + surcharge:  You, the merchant, are given 1.68% as your rate. A customer comes in with a credit card that, according to Visa, is priced at cost: 2.95%. That sale will then be charged 1.68%, plus the cost difference, plus an extra margin [1.68% + (2.95% -1.68%) + margin]. The margin is your merchant services provider's "cut" of the sale.

  • Three-tiered rate (sometimes called qualified, mid-qualified, or non-qualified): You, the merchant, are quoted three rates: 1.68% as your qualified rate, 2.14% as your mid-qualified rate, and 3.4% as your non-qualified rate. Think about these as low, medium, and high rates. If your customer hands you a card that Visa deems cheaper than the 1.68% rate, then you will be charged 1.68%. If another customer hands you a card that Visa deems equal to or greater than 1.68% but less than 2.14%, you will be charged 2.14%. As you might expect, if your customer hands you a card that is 2.14% or greater, you will be charged the 3.4%. Low, Medium, High.

  • A flat rate above cost (sometimes called interchange plus pricing): This is the simplest pricing to understand. Say the processing company quoted you 0.2% + interchange. You are charged cost for any and all cards your customers hand you, and then your processor takes an extra 0.2% above cost.

The best way to determine which pricing structure is best for your business is to find a merchant processor who is not afraid to educate you. (Keep in mind that you can never predict exactly what card your customers will present at the point of payment.)

Be as specific as possible when discussing rates and possibilities. If your merchant processor is too vague or speaks in generalities and is unwilling to show you interchange, think of him or her as the equivalent of a used car salesman trying to sell you a clunker.

Until next time,


The Truth about Credit Card Processing Rates

What the banks don't want you to know

If you've been in business for any length of time, you have encountered the dreaded Merchant Services Salesperson, who either shows up at your door or calls you on the phone. The visceral reaction that most people have to this encounter is not an uncommon one. And, believe me, having been in the industry for many years, that reaction is well deserved.

To be honest, I think the lack of regulation in the Merchant Services industry has caused it to become like the wild, wild west. Anyone can call an "800" number, sign a few papers, and Wham! they're selling credit-card processing.

So what's the story? How does it work?

To answer that, we have to take a step back, look at the whole picture, and treat Merchant Processing just like any other business. Let's take a clothing store as an example. That clothing store has a supplier for its hats, shirts, pants, etc. If that supplier decides to raise prices and reduce the quality of the merchandise it's selling, the clothing store can simply find another distributor. Obvious, right?

So who is the supplier when we deal with Credit Card Processing? Visa and MasterCard. And if we don't like the prices or quality of the merchandise, where can we go to find another supplier? The answer is... nowhere. Because there is only one supplier.

(Note: Visa and MasterCard have the most diversity of product, and they're the ones we associate with most when we talk about credit card processing, so I'm using them as the example. AmEx and Discover operate under a similar premise, though.)

And this notion that one processor, bank, or salesperson has some exclusive, special, get-it-before-it's-gone deal or rate that nobody else can offer? Well, it's just flat out false.

Just like every other business on the planet, if you have only one source but many outlets for a product, then it stands to reason that the base cost of the product (called interchange in Merchant Services-speak) is the same for everyone. What you should really be negotiating from company to company is margin and service. Believe me, the old adage "you get what you pay for" really does apply in this industry.

We have a lot more to discuss. I'll get into interchange and pricing in more detail in my next blog post...

If you would like a good explanation of how credit card processing works, check out Authorize.net's page Understanding Credit Card Processing.

Until next time,


Things to Consider When Looking for an MPOS

The changes that are occurring in the merchant services industry, specifically with the implementation of EMV standards, have been dramatic. Everyone is being bombarded with sales calls, flyers, etc. talking about how now it is the time to take advantage and upgrade your point-of-sale (POS) system. We also have a storm of articles and ads surrounding all the new tablet-based point-of-sale systems (MPOS). In this article, I'll attempt to cut through the noise and create a list of things to consider when upgrading your countertop terminal to an MPOS.

[Full disclosure: My company sells MPOS systems such as Clover, Shopkeep, and NCR Silver. This article is not intended as a recommendation of one brand over another. It is merely to be used as a guide for my fellow entrepreneurs interested in upgrading their POS systems.]

It used to be that buying a POS system was reserved for those businesses with the cash flow to handle the investment. But now, especially with the EMV changes taking hold in October 2015, getting a new POS system has gotten easier, even for startups. From the newer Square and Shopkeep to the more-established NCR and Clover, MPOS has facilitated finding an affordable system for your business.

So, how do you pick? What do you need to know?

An MPOS system can be viewed as a tool that supports two different parts of your business: marketing and operations/finance. And it is within these two departments that you need to break down which MPOS to choose.


This is the part of the business in charge of getting the word out--creating environments that attract your target market and create a customer experience that helps you maintain your client base. This is where you need to think about all your marketing efforts both online and offline (promotions, retention programs, social media, customer service, branding, etc.). Ask yourself the following:

  • Can I run the programs already in place, and can I create more?

Think of this in terms of gift cards, loyalty cards, refer-a-friend promotions, punch cards, etc. Consider how you’ll transition these programs to your new MPOS and how flexible the system will if you decide to create new ones.

  • Does the reporting provide the information I need in a format I can use?

Reporting is your only real way to measure the results of your business efforts. Look at the reports, then visualize yourself deciphering those reports to figure out if you’re getting a good return on your investments. Do you have what you need to get the job done?

  • Does the POS allow me to effectively monitor the growth of my customer base?

Again, visualize yourself monitoring the growth of your business. Does your point of sale make that easy for you? Does it tell you if you’ve had any new customers this month? How much control does it give you over your customer relationships and interactions?

  • From the customer's perspective, will this give the right look and feel in my store?

This last one is about your brand. If your main message is wrapped around the idea of making your customers feel at home, then don't get a system that says the opposite. As simple as it might seem, make sure your point of sale system matches your store’s vibe and the voice (brand) you want to convey.


This is the part of your business that deals with execution and efficiency. It makes sure that all the cogs that make up your business fit together to keep everything moving. That the processes of how things happen in your business--from purchasing supplies to collecting payments--runs smoothly and efficiently. Operations is the backbone of every company.

There is an article by People, Process and Profit that gives a great overview of what operations is. With this definition in mind, the first question you need to answer is:

  • Does this POS system capture and manage all the information my business deems important in a manner that I can use and work with?

Think of this in terms of your accounting software, CRM, payroll, inventory, cost, time frame of delivery, integration with outside partners, etc. A POS system should make running a business easier, not more complicated.

  • Does this POS systems give me the ability to develop and grow my business?

Operations is not only concerned with the present, but also with achieving future goals of the company. This second question addresses that aspect. No one wants to be boxed into a purchase that won't work for them in the future. But this doesn't mean that you can’t purchase a simple POS today and then find a more sophisticated one later on down the road. Some companies, like North American Bancard, give businesses a free simple POS. Which brings us to the next question.

  • Does this machine make financial sense now and in the future?

Answering this questions is easy. Based on money in and money out, does your business have the resources to absorb the added cost of having an MPOS system? Most MPOS systems are cloud-based point-of-sale systems that charge a monthly fee for cloud storage and other perks. Does the cost you'll incur, whether in an increased percentage rate or a monthly fee, still add value to your business? And will it still make sense in the future? Some MPOS systems, like Clover, are highly customizable because they rely on an open market to add different apps. But there are subscription fees for those apps. And Clover isn't the only one. Many of the MPOS systems have partnerships with outside third parties, such as LevelUp, that integrate into their systems. But there are fees, so be aware.

Finally, one last thought:

  • Who will be using the POS on a daily basis?

This is a fundamental question, and it supersedes every other question in this article. Some things to consider: Can your employees use it comfortably? Is it easy to teach and learn? If something goes wrong with the system, what support system is in place?

If you explore all these questions, you will be on the right path to finding an MPOS that fits in with your business.

Business Loans 101

We've all seen the ads and heard the commercials. "Lowest interest rates! Easy financing! Yada, yada, yada..." It comes from everywhere; from both the big banks to the small brokers. And we are fooled into thinking that rates are the most important thing to look for in a business loan. But what's the real story?

As a small business owner, what do you need to know when you decide to get a business loan? The following is a short checklist I've created over my 15 years in the banking industry. It is my opinion of how you should approach the process of getting a loan. Follow these guidelines and your application experience will be smoother and more successful.

  1. Ask for a loan before you need it. It sounds counterintuitive, but lenders prefer to lend to people who already have money in the bank. They want to make sure clients can pay them back and that they know how to properly manage cash. Generally speaking, every small business owner should take the time to build business credit. Your business is an individual entity that, just like you, has a credit rating. And just like you, your business is judged and valued by how it has used credit throughout its life. The more you have exercised your credit the better the rates and offers you get. Think about the first credit card you ever received. Remember how high that APR was? If you've managed your credit well over the years, that starting rate is nowhere near the lower rate you currently enjoy.

  2. Leave your ego at the door. Just because your business is successful does not give you any leverage with your local bank. Despite the hand shakes, smiles, free stress balls, and fee waivers now and again, all banks and alternative lenders are regulated by the government. They have a baseline set of rules that they must follow in delivering their products and services. You need to be aware of those rules in order to successfully do business with those institutions. This is not to imply that all banks and lenders follow the same restrictions (only the baseline rules), so be informed and shop around.

  3. Interview multiple lenders. This is a very important step, although it's one not enough small business owners take. Not all banks and alternative lenders are created equal. Although the rules of lending may be universally similar, each bank and lender has a particular appetite for certain types of businesses. Speak to the loan officers and ask questions. Not just about the rules of the bank, but how that loan officer works. You need to find yourself someone who will be your partner in developing you business credit. In getting you the loan you need. DO NOT give them your Social Security Number or EIN to run a credit check until you have decided that they are the right fit. {{There is a great article by Brayden McCarthy of Fundera that goes into what pricing should really look like.}}

  4. Know their role. The two most important people to recognize when you are looking for business lending are the loan officer and the underwriter. The loan officer is the bank or lending sales agent. They are commission-based, and as such their job is to sell you on why you should do business with them. They have a financial interest in trying to get you booked. (Notice I didn't say "get you what you need." Refer to #3, and interview them before anything begins.) The second person is the underwriter, who is usually salaried. Their job is to give out money to businesses that meet the lending criteria set by the bank. Every time they approve a credit application, they take responsibility for the life of the loan. If the loan goes bad, it is a negative hit on their track record. Depending on the severity of the lapse and how often it happens, the underwriter can even lose their job. The checklist they complete while processing your application is the only thing they can hold up and say "not my fault" if your loan goes south. That's why they are so tough on guidelines and policies.

  5. "No" is not an end, but a beginning. Contrary to popular belief, if you go through the application process and get are turned down, that's a step in the right direction. Instead of seeing "No" as an end to the application process, simply view it as a note from the underwriter stating, "Please complete the following so I can approve your application." If you have chosen your loan professional the right way, they'll help you create a plan to meet the requirements. Stick with them, as the second application is sure to be easier. The records will already be on file and they'll review the new information you provide. Remember, the underwriter is trying to complete a checklist of requirements, so help them do it.

Getting a business loan, or line for that matter, is something that needs to be planned out... even built into your initial business plan before you launch. Preparing and planning in advance will help you achieve your goal and protect your business cash flow during the unavoidable rough patches. As the saying goes, "Forewarned is forearmed."

Until next time,


7 Essential Tools for Any Startup

Starting your own business is never an easy task. You need to decide what you will be selling, who you will be selling to, how you will be finding your prospective customers, and how you intend to keep them. Blended into this mix, of course, is cost and the tools you need to succeed in your venture. Following are some tools that have helped me.

1. SCORE - Your local SCORE chapter is a free resource if you need an advisor. It is not just a group of retired executives any more. Many entrepreneurs of varying backgrounds volunteer their time and effort to help their fellow entrepreneurs succeed. (Full disclosure: I like SCORE so much, I've recently become the marketing vice chair for my local chapter, Palm Beach SCORE.)

2. Insightly - I have tried several cloud-based CRMs, and in my opinion Insightly is by far the best bang for the buck. It's filled with cool features like pulling in your contacts' social network profiles and integration with Google apps and MailChimp. This is a winner in my book. Not only does it take in the information you gather from your prospects, but it adds to that information by searching out social networking profiles on such sites like LinkedIn and Facebook. Insightly helps you gather critical intel on your clients and prospects, giving you a fuller profile picture of your customer and prospects.

3. MailChimp - When you go to MailChimp's home page, the headline reads, "Send Better Email." This is it in a nutshell. Whether its email marketing, newsletter distribution, or customer follow up, MailChimp gives you the tools to design engaging emails efficiently.  The best thing about it is that you can send 12,000 emails to 2,000 subscribers for free. No contracts, and no credit cards... Awesome.

4. Square & Paypal - Getting paid for what you sell is the number-one rule for every business. For the micro company, Square and Paypal rule the market space. Offering fixed pricing and cool features like electronic invoicing with a "pay me now" button to reduce the incidence of net 30 turning into net 45. For startups, credit card processing can be daunting and expensive. Square and Paypal are simple solutions for businesses that don't yet have the customer base or the money to invest in a counter terminal or point-of-sale system. (Read my past post on pricing to get a more in-depth understanding of credit card processing rates.)

5. Onsite Catalog App - If you are a "solopreneur" or have just one salesperson, there is no better app than the Onsite App. It offers the first year free for your army of one, and allows you to have a mobile catalog of your products. Automating things like invoice generation and orders via a mobile app and desktop login. This is great for B2B businesses.

6. Slack - An online collaboration tool that is just plain cool. Instead of having your team clutter your inbox with chatter, Slack offers a cloud-based service that allows you to manage your team's communications. And it integrates with a ton of outside tools. It's compatible with Mac, Windows, Linux, iOS, and Android (Windows phone is in the works.) Think of it as your company's internal IM/content sharing/all around good guy to have around.

7. Social Networks - LinkedIn, Facebook, Google+, and Twitter. You need to have a routine in place for processing and connecting with every new person you meet. Derek Miller, contributor for Entrepreneur magazine, has a great article titled "8 Digital-Marketing Tips for Bootstrapped Startups" that breaks down the key points to remember when using social networks to promote your business.

I'm always looking for cool new apps to try out. What are your favorites?